BEIJING -- China's stock market has gradually stabilized, as shown by reasonable stock prices after plunges since mid-June, lower leverage and abundant market liquidity, the securities regulator said Sunday.

By Wednesday, the price-to-earnings ratio for the benchmark Shanghai Composite Index dropped from 25 in mid-June to 15.6, the China Securities Regulatory Commission (CSRC) responded to queries from Xinhua.

The ratio for the smaller Shenzhen Component Index was down from 70.1 to 37.3, and from 134.5 to 63.6 for the ChiNext Index, China's NASDAQ-style board of growth enterprises, the CSRC said.

Risks associated with high-leverage stock financing has been released, as some illegal financing activities were cleared and stock financing from brokerages dropped to a normal level, the CSRC said.

On Wednesday, the CSRC fined three companies for illegal stock financing activities, including Shanghai-based Mecrt Corporation, Hangzhou-based Hundsun Technologies Inc. and Hithink Flush Information Network Co Ltd.

Market liquidity is relatively abundant, as mutual funds, social security funds, insurers and other institutional investors have abundant capital at hand, the CSRC said.